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Accounting
Information
Systems
CHAPTER 8
Learning Objectives
1.
2.
3.
Explain the relationship of the accounting
information system to the management
information system and identify the
components of an AIS
Explain the goals and uses of special
journals.
Describe the use of controlling accounts
and subledgers.
Learning Objectives
4.
5.
6.
7.
Journalize and post transactions using
special journals.
Prepare and test the accuracy of
subledgers.
Apply journalizing and posting of
transactions using special journals in a
periodic inventory system. (Appendix 8A)
Journalize and post transactions with sales
taxes to special journals. (Appendix 8B)
Management Information Systems
A system designed to collect and process
data within an organization for the purpose
of providing users with information.
Management Information System
Internal
External
Sales and
Marketing
System
Community
Competitors
Production
System
Finance
System
Customers
Government
Human
Resources
System
Accounting
Information
System
Industry
Suppliers
Accounting Information Systems
(AIS)
The people, records, methods, and
equipment that collect and process data
from transactions and organize them in
useful forms, and communicate results to
decision makers.
Components of an AIS
Feedback Loop
Accounts
Payable
Inputs
Source
Documents
Capital
Assets
Accounting
Information
System
Accounts
Receivable
Outputs
Payroll
Reports/
Information
to Internal/
External
Users
Accounting and Technology
Impact of technology-based systems
on accounting.
 Electronic
funds transfer (EFT)
 E-commerce
 Computer hardware
 Computer software
Special Journals
Most organizations use Special Journals
to enhance efficiency of transaction
processing.
Types
 Sales Journal
 Cash Receipts Journal
 Purchases Journal
 Cash Disbursements Journal
Subledgers
A listing of individual accounts with a
common characteristic.
Common Subledgers
 Accounts Receivable
 Accounts Payable
 Inventory
Accounts Receivable Subledger
ACCOUNTS RECEIVABLE LEDGER
Adams Company
Date
PR
Debit
Credit Balance
Jan. RECEIVABLE
1 S5
500
ACCOUNTS
LEDGER
Baine Company
Date
PR
Debit
Credit Balance
Jan. RECEIVABLE
16 S5
1,000
ACCOUNTS
LEDGER
1,000
Cook Company
Date
Jan.
PR
25
S5
Debit
415
Credit Balance
415
A separate subledger account is
used to show how much each
individual customer owes.
500
Accounts Receivable Subledger
ACCOUNTS RECEIVABLE LEDGER
Adams Company
After all items
Date
PR
Debit Credit Balance
are posted,
Jan.RECEIVABLE
1 S5
500
500
ACCOUNTS
LEDGER
the balance in
Baine Company
the Accounts
Date
PR
Debit Credit Balance
Receivable
Jan.RECEIVABLE
16 S5
1,000
1,000
ACCOUNTS
LEDGER
controlling
Cook Company
account must Date
PR
Debit Credit Balance
equal the sum Jan. 25 S5
415
415
of the
GENERAL LEDGER
balances in
Accounts Receivable
No. 106
the subledger.
Date
PR Debit Credit Balance
Jan. 31 S5
1,915
1,915
Mini-Quiz
A subsidiary ledger:
A) Includes transactions not covered by special
journals.
B) Is a listing of all of the accounts of a business.
C) Is a listing of individual accounts with a common
characteristic.
D) Is a listing of all accounts with balances.
E) Is a listing of all special journals.
Mini-Quiz
A subsidiary ledger:
A) Includes transactions not covered by special
journals.
B) Is a listing of all of the accounts of a business.
C) Is a listing of individual accounts with a common
characteristic.
D) Is a listing of all accounts with balances.
E) Is a listing of all special journals.
Sales Journal
The sales journal is used to record sales
of merchandise on credit.
Sales Journal — Example
On February 2, Jason Henry purchased $450 of
merchandise on account from Outdoors
Unlimited. The goods originally cost Outdoors
$315. Record the entry in the Sales Journal.
(Assume the use of a perpetual inventory
system.)
Sales Journal
SALES JOURNAL
Account
Debited
Date
2011
Feb. 2 Jason Henry
Invoice
Number
307
PR
Dr. A/R
Cr. Sales
Page 1
Dr. COGS
Cr.
Inventory
450
Since each transaction yields a debit to Accounts
Receivable and a credit to Sales, we need only one
column for these two accounts. This column total is
posted monthly.
315
Sales Journal
SALES JOURNAL
Account
Debited
Date
2011
Feb. 2 Jason Henry
Invoice
Number
307
PR
Dr. A/R
Cr. Sales
450
Page 1
Dr. COGS
Cr.
Inventory
315
Similarly, each transaction yields a debit to Cost of
Goods Sold and a credit to Inventory. Therefore, these
accounts can also be included together in one column.
This column total would also be posted monthly.
Sales Journal
SALES JOURNAL
Date
2011
Feb. 2
Account
Debited
Invoice
Number
Jason Henry
307
Daily, each
transaction is posted
to the appropriate
Accounts Receivable
subledger account.
PR
Page 1
Dr. COGS
Cr.
Inventory
Dr. A/R
Cr. Sales
450
315
ACCOUNTS RECEIVABLE SUBLEDGER
Jason Henry
Date
Feb.
PR
2
Debit
450
Credit Balance
450
Sales Journal
SALES JOURNAL
Date
2011
Feb. 2
Account
Debited
Invoice
Number
Jason Henry
307
A ü in the PR
column indicates
the transaction has
been posted to the
subledger account.
Dr. A/R
Cr. Sales
PR
ü
Page 1
Dr. COGS
Cr.
Inventory
450
315
ACCOUNTS RECEIVABLE SUBLEDGER
Jason Henry
Date
PR
Debit
Credit Balance
2011
Feb.
2
S1
450
450
Sales Journal
SALES JOURNAL
Date
2011
Feb. 2
7
13
15
Account
Debited
Invoice
Number
Jason Henry
Albert Co.
Bam Moore
Paul Roth
307
308
309
310
PR
ü
ü
ü
ü
Dr. A/R
Cr. Sales
Page 1
Dr. COGS
Cr.
Inventory
450
500
350
200
Here is the Sales Journal after
recording some additional sales.
315
355
260
150
Sales Journal
SALES JOURNAL
Date
2011
Feb.
2
7
13
15
22
25
28
28
Account
Debited
Invoice
Number
Jason Henry
Albert Co.
Bam Moore
Paul Roth
Jason Henry
Frank Booth
Albert Co.
Totals
307
308
309
310
311
312
313
GENERAL LEDGER
Accounts Receivable
Date
PR Debit Credit
2011
Feb. 2
S1
2,150
PR
ü
ü
ü
ü
ü
ü
ü
Dr. A/R
Cr. Sales
450
500
350
200
225
175
250
2,150
(106/413)
Page 1
Dr. COGS
Cr.
Inventory
315
355
260
150
155
95
170
1,500
(502/119)
On Feb. 28th , post the
No. 106
Balance column total to Accounts
Receivable and Sales.
2,150
GENERAL LEDGER
Sales
Date
2011
Feb. 2
PR
S1
Debit
Credit
No. 413
Balance
2,150
2,150
Sales Journal
SALES JOURNAL
Date
Account
Debited
Invoice
Number
Jason Henry
Albert Co.
Bam Moore
Paul Roth
Jason Henry
Frank Booth
Albert Co.
Totals
307
308
309
310
311
312
313
ü
2011
Feb.
2
7
13
15
22
25
28
28
PR
ü
ü
ü
ü
ü
ü
GENERAL LEDGER
Inventory
Date
PR
2011
Feb. 2
S1
Debit
Credit
1,500
Dr. A/R
Cr. Sales
450
500
350
200
225
175
250
2,150
(106/413)
Page 1
Dr. COGS
Cr.
Inventory
315
355
260
150
155
95
170
1,500
(502/119)
No. 119 Now post to the COGS and
Balance
Inventory accounts …
1,500
GENERAL LEDGER
Cost of Goods Sold
Date
PR Debit Credit
2011
Feb. 2
S1
1,500
No. 502
Balance
1,500
Sales Journal
SALES JOURNAL
Date
2011
Feb.
2
7
13
15
22
25
28
28
Account
Debited
Invoice
Number
Jason Henry
Albert Co.
Bam Moore
Paul Roth
Jason Henry
Frank Booth
Albert Co.
Totals
307
308
309
310
311
312
313
GENERAL LEDGER
Inventory
Date
PR
2011
Feb. 2
S1
Debit
Credit
1,500
PR
ü
ü
ü
ü
ü
ü
ü
Dr. A/R
Cr. Sales
450
500
350
200
225
175
250
2,150
(106/413)
Page 1
Dr. COGS
Cr.
Inventory
315
355
260
150
155
95
170
1,500
(502/119)
No. 119 … and include the posting
references.
Balance
1,500
GENERAL LEDGER
Cost of Goods Sold
Date
PR Debit Credit
2011
Feb. 2
S1
1,500
No. 502
Balance
1,500
Testing the Ledger
Schedule of Accounts Receivable
February 28, 2011
Frank Booth
$
175
Jason Henry
675
Bam Moore
350
Paul Roth
200
Albert Co.
750
Total accounts receivable $ 2,150
The Accounts
Receivable
controlling
account and
the subledger
are in balance.
GENERAL LEDGER
Accounts Re ce ivable
Date
PR
De bit
No. 106
Cre dit
Balance
2011
Fe b
28 S1
2,150
2,150
Sales Returns and Allowances
If a company has few sales returns, they may record
them in the General Journal.
GENERAL JOURNAL
Date
2011
Description
Mar 7 Sales Returns and Allowances
Accounts Receivable--Bam Moore
Page 34
PR
414
Debit
Credit
10
106/ ü
Merchandise Inventory
119
Cost of Goods Sold
502
10
6
6
But, if a company has lots of sales returns, they may
use a Sales Returns and Allowances Journal.
Cash Receipts Journal
The cash receipts journal is used to
record all receipts of cash.
Cash Receipts Journal — Example
CASH RECEIPTS JOURNAL
Date
2011
Feb. 7
12
14
17
20
21
22
23
25
28
28
Accounts Credited
Sales
Jason Henry
Sales
Albert Co.
Note payable
Sales
Interest revenue
Bam Moore
Paul Roth
Sales
Total
PR
Explanation
Cash sale
Invoice, Feb 2
Cash sale
Invoice, Feb 7
Note to bank
Cash sale
Bank account
Invoice, Feb 13
Invoice, Feb 17
Cash sale
Cash
Dr.
4,450
441
3,925
490
750
4,700
250
343
196
4,225
19,770
(101)
Sales
Discount
Dr.
9
10
Accts.
Rec.
Cr.
Sales
Cr.
Other
Accts.
Cr.
Page 1
COGS Dr.
Inventory
Cr
4,450
3,150
3,925
2,950
450
500
750
4,700
3,400
250
7
4
30
(415)
350
200
1,500
(106)
4,225
17,300
(413)
Categories of Cash Receipts
Cash from cash sales
Cash from credit customers
Cash from other sources
1,000
(x)
3,050
12,550
(502/119)
Cash Receipts Journal
CASH RECEIPTS JOURNAL
Date
2011
Feb. 7
12
14
17
Accounts Credited
Sales
Jason Henry
Sales
Albert Co.
20
21
Note payable
Sales
22
23
25
28
28
Interest revenue
Bam Moore
Paul Roth
Sales
Total
PR
ü
ü
245
Explanation
Cash
Dr.
Cash sale
Invoice, Feb 2
Cash sale
Invoice, Feb 7
4,450
441
3,925
490
Note to bank
Cash sale
750
4,700
409 Bank account
Invoice, Feb 13
ü
ü Invoice, Feb 17
Cash sale
250
343
196
4,225
19,770
(101)
Page 1
Sales
Discount Accts. Rec.
Dr.
Cr.
Sales
9
450
10
500
Cr.
Other
Accts.
Cr.
COGS Dr.
Inventory Cr
4,450
3,150
3,925
2,950
750
4,700
3,400
250
7
4
350
200
30
1,500
(415)
(106)
4,225
17,300
(413)
3,050
12,550
1,000
(x)
(502/119)
Amount is posted individually to subledger.
Acct. No. Amount is posted to specified account.
ü
Purchases Journal
The Purchases Journal is used to
record all purchases on credit.
Purchases Journal
PURCHASES JOURNAL
Date
2011
Feb 3
5
13
20
25
28
28
Account
Horung Supply Co
Ace Mfg. Co
Wynet & Co.
Smite Co.
Ace Mfg. Co
Store supplies/ITT Co.
Totals
üü
ü
Invoice
Date
Feb. 2
5
10
18
24
28
Terms
PR
ü
n/30
2/10,n/30
ü
2/10,n/30
ü
2/10,n/30
ü
2/10,n/30
ü
125/ ü
n/30
Page 3
Accts.
Payable
Cr.
350
200
150
300
100
225
1,325
(201)
Inventory
Dr.
275
200
150
300
100
125
1,150
(505)
Office
Supplies
Dr.
Other
Accts.
Dr.
75
25
100
(124)
(
75
75
üü )
Amount is not posted individually to an account.
Amount is posted individually to subsidiary ledger.
Acct. No. Amount is posted to specified account.
Cash Disbursements Journal
Outdoors Unlimited
The Cash
Disbursements
Journal is used to
record all
payments of cash.
Cash Disbursements Journal
CASH DISBURSEMENTS JOURNAL
Date
Ch. No.
Payee
2011
Feb. 3
105 L & N Railroad
5
106 East Sales Co.
13
107 Ace Mfg. Co
20
108 Jerry Hale
25
109 Wynet & Co.
28
110 Smite Co.
28
Totals
üü
ü
Account Debited
Inventory
Inventory
Ace Mfg. Co.
Salaries expense
Wynet & Co.
Smite Co.
PR
119
119
ü
622
ü
ü
Cash
Cr.
15
25
196
250
147
294
927
(101)
Page 1
Merch.
Other
Accounts
Inventory Accounts Payable
Cr.
Dr.
Dr.
15
25
4
200
250
3
6
13
(119)
290
( ü
ü)
150
300
650
(201)
Amount is not posted individually to an account.
Amount is posted individually to subledger.
Acct. No. Amount is posted to specified account.
General Journal
Used for all transactions not recorded
in a special journal.
 Closing
entries
 Adjusting entries
 Correcting entries
 Other entries
Mini-Quiz
Give the name of the journal in which the following
transactions should be recorded.
Purchased equipment on credit.
PJ
Sold merchandise for cash.
CRJ
Paid for supplies that were purchased on
account.
Sold merchandise on account.
CDJ
SJ
Special Journals Under a
Periodic System-Appendix 8A
Recording and posting is similar to a
perpetual system.
 Some of the columns change in a periodic
system.

Sales Journal — Periodic System
The column for
Cost of Goods
Sold and
Inventory is not
needed with the
periodic
system.
SALES JOURNAL
Date
2011
Feb. 2
7
13
15
22
25
28
Account
Debited
Invoice
Number
Jason Henry
Albert Co.
Bam Moore
Paul Roth
Jason Henry
Frank Booth
Albert Co.
307
308
309
310
311
312
313
28 Total
PR
Page 3
Dr. A/R
Cr. Sales
ü
450
500
350
200
225
175
250
ü
ü
ü
ü
ü
ü
2,150
(106/413)
Cash Receipts Journal
Periodic System
CASH RECEIPTS JOURNAL
Date
2011
Feb. 7
12
14
17
Accounts Credited
Sales
Jason Henry
Sales
Albert Co.
20
21
Note payable
Sales
22
23
25
28
28
Interest revenue
Bam Moore
Paul Roth
Sales
Total
PR
ü
ü
245
Explanation
Cash
Dr.
Cash sale
Invoice, Feb 2
Cash sale
Invoice, Feb 7
4,450
441
3,925
490
Note to bank
Cash sale
750
4,700
409 Bank account
Invoice, Feb 13
ü
ü Invoice, Feb 17
Cash sale
250
343
196
4,225
19,770
(101)
Sales
Discount Accts. Rec.
Dr.
Cr.
Sales
Page 1
Other
Accts.
Cr.
Cr.
4,450
9
450
10
500
3,925
750
4,700
250
7
4
350
200
30
1,500
(415)
(106)
4,225
17,300
(413)
1,000
(x)
The column for Cost of Goods Sold and Inventory is
not needed with the periodic system.
Purchases Journal — Periodic System
PURCHASES JOURNAL
Date
2011
Feb 3
5
13
20
25
28
28
Account
Horung Supply Co
Ace Mfg. Co
Wynet & Co.
Smite Co.
Ace Mfg. Co
Store supplies/ITT Co.
Totals
Invoice
Date
Feb. 2
5
10
18
24
28
Terms
PR
ü
n/30
2/10,n/30
ü
2/10,n/30
ü
2/10,n/30
ü
2/10,n/30
ü
n/30
125/ ü
Page 3
Accts.
Office
Payable Purchases Supplies
Cr.
Dr.
Dr.
350
200
150
300
100
225
1,325
(201)
275
200
150
300
100
125
1,150
(505)
Other
Accts.
Dr.
75
25
100
(124)
(
75
75
üü )
The Inventory column in the perpetual system is
replaced with Purchases column in the periodic
system.
Cash Disbursements Journal
Periodic System
CASH DISBURSEMENTS JOURNAL
Date
Ch. No.
Payee
2011
Feb. 3
105 L & N Railroad
5
106 East Sales Co.
13
107 Ace Mfg. Co
20
108 Jerry Hale
25
109 Wynet & Co.
28
110 Smite Co.
28
Totals
Account Debited
Inventory
Inventory
Ace Mfg. Co.
Salaries expense
Wynet & Co.
Smite Co.
PR
119
119
ü622
üü
Cash
Cr.
15
25
196
250
147
294
927
(101)
Page 1
Purchase
Other
Accounts
Discounts Accounts Payable
Cr.
Dr.
Dr.
15
25
4
200
250
3
6
13
(507)
290
(x)
150
300
650
(201)
The Inventory column in the perpetual system is
replaced with Purchases Discounts column in the
periodic system.
Special Journals and Sales
Taxes- Appendix 8B
Additional columns must be added to
special journals to record PST and GST.
Journal
Sales
Cash Rec.
Purchases
Cash Disb.
Column Needed
GST
PST
GST
Payable Payable Receivable
yes
yes
yes
yes
yes
yes
Review
Identify the different types of special
journals?
Sales journal
Cash receipts journal
Purchases journal
Disbursements journal
Review
What is the purpose of special journals?
Special journals help reduce the costs
related to the time and effort of posting
accounts.
Review
Why should sales to and receipts of cash
from credit customers be recorded and
posted daily?
Daily recording and posting of credit
sales and cash receipts from customers
provides up-to-date information used in
decisions about granting credit to
customers. Also, up-to-date account
balances are needed if customers inquire
about the amount of their balances.
End of Chapter